Skip to main content
SpringerLink
Log in

How clean is clean? Incremental versus radical technological change in coal-fired power plants

  • Regular Article
  • Published:
Journal of Evolutionary Economics Aims and scope Submit manuscript

Abstract

In the discussion on innovations for sustainable development, radical innovations are frequently called for in order to transform society into a system perceived as sustainable successfully. The reason for this is the greater environmental efficiency of these innovations. This hypothesis is, however, not supported by empirical evidence. Given the background of a global increase in coal-fired power plants and the consequent environmental impacts to be expected, the hypothesis that radical innovations are superior to incremental innovations and will thus be introduced to the market is reviewed on the basis of fossil fuel power plants. In this paper we examine the diffusion of incremental and radical innovations in the field of power plants and the basic obstacles confronting these innovations. For example, we compare Pressurized Pulverized Coal Combustion (PPCC) as a radical innovation and supercritical coal-fired power plants as an incremental innovation. PPCC failed due to technological uncertainty. We show in an ex-post analysis of the German R&D portfolio for power plants in the past three decades from an environmental viewpoint that, for radically innovative technologies, it was difficult to be accepted by possible investors. The future potential of radical innovations in the field of power plant technology is to be regarded as relatively low, especially due to technological uncertainty, market uncertainty and sunk costs. The conclusion for future R&D work in the sector of large-scale power plants is that an innovation is more likely to succeed if it follows established technological trajectories. In the context of energy market liberalization, hardly any radical innovations are expected in the technology of power plants. The findings of this paper may also be helpful to evaluate risks or probabilities of success of technologies being developed currently. We discuss for example the technological trajectories currently favored in CO2 capture.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5

Similar content being viewed by others

References

  • Astebro T (2004) Sunk costs and the depth and probability of technology adoption. J Ind Econ LII(3):381–399

    Article  Google Scholar 

  • ATLAS (1997) Main report—energy technology information base 1980-2010. European Commission, DG XVII (Energy). THERMIE Program. Brussels

  • Bakker G (2005) The decline and fall of the European film industry: sunk costs, market size, and market structure, 1890–1927. Econ Hist Rev LVIII 2(2005):310–351

    Article  Google Scholar 

  • Berkhout F (2005) Technological regimes, environmental performance and innovation systems: tracing the links. In: Weber M, Hemmelskamp J (eds) Towards environmental innovation systems. Springer, Berlin

    Google Scholar 

  • Berkhout F, Smith A, Stirling A (2004) Socio-technical regimes and tranistion contexts. In: Elzen B, Geels FW, Green K (eds) System innovation and the transition to sustainability—theory, evidence and policy. Edward Elgar, Cheltenham

    Google Scholar 

  • Bohn D (2008) Future developments for CO2-free power plants technologies with integrated gas turbines. VGB PowerTech 7:24–30

    Google Scholar 

  • Carillo-Hermosilla J (2006) A policy approach to the environmental impacts of tchnological lock-in. Ecol Econ 58:717–742

    Article  Google Scholar 

  • Commission of the European Communities (2007) Communication from the Commission of the Commission to the European Council and the European Parliament - an energy policy for Europe. Brussels

  • COORETEC (2003) Forschungs- und Entwicklungskonzept für emissionsarme fossil befeuerte Kraftwerke, BMWA Dokumentation Nr. 527

  • David PA (1985) Clio and the economics of QWERTY. Am Econ Rev Int Polit Econ 75:332–337

    Google Scholar 

  • Defeuilley C, Furtado AC (2004) Impacts de l’ouverture à la conucurrence sur la R&D dans le secteur électrique. Ann Public Coop Econ 71(1):5–28

    Article  Google Scholar 

  • Dosi G (1988) Sources, procedures, and microeconomic effects of innovation. J Econ Lit XXVI:1120–1171

    Google Scholar 

  • Faber A, Frenken K (2008) Models in evolutionary economics and environmental policy: towards an evolutionary environmental economics. Technol Forecast Soc Change 76:462–470. doi:10.1016/j.t4echnfore.2008.04.009

    Article  Google Scholar 

  • Freemann C (1992) The economics of hope. London, New York

    Google Scholar 

  • Garcia R, Calantone R (2002) A critical look at technological innovation ty-pology and innovationess terminology: a literature review. J Prod Innov Manag 2002:110–132

    Article  Google Scholar 

  • Geels FW (2004) Understanding system innovations: a critical literature review and a conceptual synthesis. In: Elzen B, Geels FW, Green K (eds) System innovation and the transition to sustainability - theory, evidence and policy. Edward Elgar, Cheltenham

    Google Scholar 

  • Geels FW, Elzen B, Green K (2004) General introduction: system innovation and transitions to sustainability. In: Elzen B, Geels FW, Green K (eds) System innovation and the transition to sustainability - theory, evidence and policy. Edward Elgar, Cheltenham

    Google Scholar 

  • Held H, Krieger E, Lessmann K, Edenhofer O (2009) Efficient climate policies under technology and climate uncertainty. Energy Econ 31:550–561

    Article  Google Scholar 

  • IEA (International Energy Agency) (2008a) CO2 capture and storage: a key carbon abatement option. OECD/IEA, Paris

  • IEA (International Energy Agency) (2008b) World energy outlook, (IEA), I. E. A. IEA/OECD, Paris

  • IPCC (International Panel on Climate Change) (2005) IPCC special report on carbon dioxide capture and storage. Working group III of the intergovernmental panel on climate change. Cambridge University Press, New York

    Google Scholar 

  • Jacquier-Roux V, Bourgeois B (2002) New network of technological creation in energy industries: reassessment of the roles of equipment suppliers and operators. Technol Anal Strateg Manag 14(4):399–417

    Article  Google Scholar 

  • Jäger G (2005) Großversuch in Scholven. BWK 57:36–37

    Google Scholar 

  • Jamasb T, Pollitt M (2008) Liberalisation and R&D in network industries: the case of the electricity industry. Res Policy 37:995–1008

    Article  Google Scholar 

  • Jensen SG, Meibom P (2008) Investments in liberalised power markets—gas turbine investment opoortunities in the Nordic power system. Electr Power Energy Syst 30:113–124

    Article  Google Scholar 

  • Kather A, Rafailidis S, Hermsdorf C, Klostermann M, Maschmann A, Mieske K, Oexmann J, Pfaff I, Rohloff K, Wilken J (2008) Research and development needs for clean coal deployment. IEA Clean Coal Centre, Report CCC/130, London

  • Kemp R (1997) Environmental policy and technical change. Edward Elgar, Cheltenham, Brookfield

    Google Scholar 

  • Kemp R (2007) An example of “managed transition”: the transformation of the waste management subsystem in the Netherlands (1960-2000). In: Lehmann-Waffenschmidt M (ed) Innovations towards sustainability - conditions and consequences. Physica, Heidelberg

    Google Scholar 

  • Kemp R, Arundel A (1998) Survey indicators for environmental innovation, IDEA, Indicators and Data for European Analysis) paper series 8/1998

  • Kemp R, Rotmanns J (2005) The management of the co-evolution of technical, environmental and social systems. In: Weber M, Hemmelskamp J (eds) Towards environmental innovation systems. Springer, Berlin

    Google Scholar 

  • Klemmer P, Lehr U, Löbbe K (1999) Umweltinnovationen: Anreize und Hemmnisse, Berlin

  • Lezuo A, Riedle K, Wittchow E (1989) Entwicklungstendenzen steinkohlebefeuerter Kraftwerke. BWK 41:13–21

    Google Scholar 

  • Lutz C, Meyer B, Nathani C, Schleich J (2005) Endogenous technological change and emissions: the case of the German steel industry. Energy Policy 33:1143–1154

    Article  Google Scholar 

  • Manez JA, Rochina-Barrachina ME, Sanchis A, Sanchiz JA (2009) The role of sunk costs in the decision to invest in R&D. J Ind Econ LVII(4):712–735

    Google Scholar 

  • Martin H (1988) Steigerung des prozesswirkungsgrades kohlegefeuerter Kraftwerke. VGB Kraftwerkstechnik 68:219–225

    Google Scholar 

  • OECD (Organisation for Economic Cooperation and Development) (2005) Guidelines for Collecting and Interpreting Technological Innovation Data – Oslo Manual, The Measurement of Scientific and Technical Activities Series, Paris

    Google Scholar 

  • Otto VM, Reilly J (2008) Directed technical change and the adoption of CO2 abatement technology: the case of CO2 capture and storage. Energy Econ 30:2879–2898

    Article  Google Scholar 

  • Pavitt K (1984) Sectoral patterns of technical change: towards a taxanomy and a theory. Res Policy 13(3):343–373

    Article  Google Scholar 

  • Pindyck RS (2000) Irreversibilities and the timing of environmental policy. Resour Energy Econ 22:233–259

    Article  Google Scholar 

  • Pruschek R, Renz U, Weber E (1990) Kohlekraftwerke der Zukunft. Stand und Entwicklung, Erprobung und Planung neuer Kohlekraftwerks-Technologien, Studie im Auftrag des Ministers für Wirtschaft, Mittelstand und Technologie des Landes NRW, Düsseldorf

  • Reinelt PS, Keith DW (2007) Carbon capture retrofits and the cost of regulatory uncertainty. Energy J 28(4):101–127

    Google Scholar 

  • Rennings K (2000) Redefining innovation - eco-innovation research and the contribution from ecological economics. Ecol Econ 2000:319–332

    Article  Google Scholar 

  • Rennings K, Zwick T (2002) The employment impact of cleaner production on the firm level - empirical evidence from a survey in five European countries. International Journal of Innovation Management (IJIM), Special Issue on. Manag Innov Environ Sustain 6:319–342

    Article  Google Scholar 

  • Rennings K, Kemp R, Bartolomeo M, Hemmelskamp J, Hitchens D (2004) Blueprints for an integration of science, technology and environmental policy. ZEW, Mannheim

    Google Scholar 

  • Roques FA (2008) Technology choices for new entrants in liberaliszed markets: the value of operating flexibility and contractual arrangements. Util Policy 16:245–253

    Article  Google Scholar 

  • Rose NL, Joskow PL (1990) The diffusion of new technologies: evidence from the electric utility industry. RAND J Econ 21(3):354–373

    Article  Google Scholar 

  • Rosenberg N (1972) Factors affecting the diffusion of technology. Explor Econom Hist 10:3–33

    Article  Google Scholar 

  • Sartorius C, Zundel S (eds) (2005) Time strategies, innovation and environmental policy. Cheltenham

  • SRU (German Advisory Council on the Environment) (2008) Umweltschutz im Zeichen des des Klimawandels, Berlin

  • Stiglitz JE (1987) Technological change, sunk costs and competition. Brookings Pap Econ Act 3:883–937

    Article  Google Scholar 

  • Vellinga P (2004) Foreword. In: Elzen B, Geels FW, Green K (eds) System innovation and the transition to sustainability—theory, evidence and policy. Edward Elgar, Cheltenham

    Google Scholar 

Download references

Acknowledgements

The authors would like to express their appreciation for the support in the context of the project “Decision criteria towards efficiency of strategic R&D subsidies—innovation–economic principles and applications to new energy technologies”, which was funded by the support program EDUARD (Energie-Daten und Analyse R&D—Energy Data and Analysis R&D) initiated by the German Federal Ministry of Economics and Technology (BMWi). Thanks for productive comments to our colleagues Andres Löschel and Sascha Rexhäuser, to Joachim Schleich from the Fraunhofer ISI Institute, and to anonymous referees. We would like to thank Anne-Kathrin Koch for a language check.

Author information

Authors and Affiliations

  1. Centre for European Economic Research (ZEW), ZEW, P.O. Box 103443, 68161, Mannheim, Germany

    Klaus Rennings

  2. Forschungzentrum Jülich, Institute of Energy Research – Systems Analysis and Technology Evaluation (IEF-STE), Jülich, Germany

    Peter Markewitz & Stefan Vögele

Authors
  1. Klaus Rennings
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Peter Markewitz
    View author publications

    You can also search for this author in PubMed Google Scholar

  3. Stefan Vögele
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Klaus Rennings.

Rights and permissions

Reprints and permissions

About this article

Cite this article

Rennings, K., Markewitz, P. & Vögele, S. How clean is clean? Incremental versus radical technological change in coal-fired power plants. J Evol Econ 23, 331–355 (2013). https://doi.org/10.1007/s00191-010-0198-9

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s00191-010-0198-9

Keywords

JEL Classification

Search

Navigation